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MEIBC: Constitutional court ruling did not reinforce collective bargaining principles.

Sep 5, 2023

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MEIBC
CONSTITUTIONAL COURT RULING
DID NOT
REINFORCE COLLECTIVE BARGAINING PRINCIPLES

by Gerhard Papenfus

The recent ruling by the Constitutional Court, whereby the Court dismissed NEASA’s petition for leave to appeal, has been touted by the federation Seifsa as being of extreme importance as it “reinforces the principles of centralised collective bargaining.”

The ruling is presented as one that confirmed the right of parties to extend collective agreements provided that the correct procedures have been followed.

However, the Constitutional Court ruling does nothing of the sort, in fact, none of these issues even arose in said ruling. The Court based its decision solely on the fact that the appeal, in the view of the Court, has become moot and, consequently, has become academic in nature and will serve no practical purpose. The Court never considered any principles of centralised collective bargaining, and most certainly did not reinforce them.

The Constitutional Court did not provide reasons for its view, but we can only assume that the reason for the decision is that the Minister of Employment and Labour had already extended the MEIBC Main Agreement and that an appeal would therefore serve no purpose.

As NEASA believes that the Labour Court made serious errors in its initial judgement, which will have far reaching implications in the future, we disagree with the assertion by the Constitutional Court that the matter is academic. Nonetheless, we are bound by the Constitutional Court’s ruling.

This, however, is not the end of the road.

NEASA has already filed a review against the decision of the Minister to extend the Agreement and this matter will be argued before Court in due course.

The so-called ‘levelling of the playing field’ argument.

The federation Seifsa continuously claims that the purpose of the extension of agreements is to ‘level the playing field’ and to prevent competition between employers based on differential wage rates. However, this argument is simply not sustainable. If anything, extension of agreements results in a very uneven playing field for employers.

Centralised collective bargaining is simply a commercial tool for large employers, predominately represented by Seifsa, as they are firstly, more exposed to industrial action than SMMEs and secondly, as wages represent a small percentage of their overall costs, are not impacted to the same extent as SMMEs by high wages and other conditions of employment.

SMMEs bear the brunt of excessive wages and unsustainable conditions of employment which large employers utilise to eliminate their competition. Notably, large employers are normally situated in urban areas, whereas many smaller employers operate in rural areas without the benefit of access to markets and infrastructure. This factor also weighs heavily on the ability of these employers to adhere to the prescribed conditions of employment.

The current centralised collective bargaining regime is extremely lopsided and unsustainable, and will eventually lead to the demise of many SMMEs and consequent job losses. In the long run, it will poison the whole economy and exacerbate socio-economic upheaval.

NEASA will continue to fight for a regime that is fair and sustainable for all concerned and which does not benefit only a few dominant role players.

Gerhard Papenfus is the Chief Executive of the National Employers’ Association of South Africa (NEASA).

For more information:
NEASA Media Department
media@neasa.co.za

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